Two frontrunners emerge for Jayajothi Cements stake, India

Citi Venture Capital International (CVCI) and Blackstone have emerged as the two private equity (PE) investors shortlisted by the Shriram Group to purchase a stake in its Jayajothi Cements cement unit.

The Times of India reports that the two companies are vying for a "big stake“ in Jayajothi Cements but with Shriram continuing to manage the cement unit. Shriram had explored options of selling the stake in Jayajothi to global majors like CRH and Holcim (both of which are active in the Indian market) but the company is now leaning towards private equity firms who would be able to invest money in its ailing cement business.

"Two funds are in the final list. Both have asked us to run the plant and the business. Besides as a group, we know what a PE investor wants as we work with several of them across our businesses," R Thyagarajan, chairman of Shriram Group, told the Times.

Shriram had acquired Jayajothi after converting loans into equity. The Jayajothi cement plant is situated in in the Kurnool-Kadappa region of Andhra Pradesh and has a cement capacity of 3.2Mta. Jayajothi Cement had struggled to keep operations going until Shriram picked up a controlling interest in it from the original promoter Sree Jayavilas Group, which still holds the remaining shares.